Stocks finished amidst volatile trading last week. The volatility was largely macro driven with news out of Greece and China driving headlines and making for a tenuous trading backdrop (five daily swings of 1.5% or more). Important trend lines were tested but ultimately held support. For the week the S&P was flat while the Russell 2000 advanced 0.3%.

While there has been plenty of technical damage done recently (the S&P broke its 200 day moving average only to rebound later in the week) as of now, there has been no inflection in our long term view. Indicators stayed positive despite the wobbly backdrop. In the short term, expectations remain more balanced (neutral) as I watch the events of the past few weeks play out. Recent developments out of Greece have been positive, however, I doubt we have heard the end of the debt negotiation.

To me, China remains the bigger risk. The stock market in China isn’t as deep as ours (the public is 85% of trading) and therefore, is prone to volatile gyrations. While the selloff is unlikely to trigger any sort of systemic financial risk, I'm less convinced that there won’t be some economic impact. In times like these, many investors need to be reminded that although the Fed is on track to tighten, other major central banks (ECB, BoJ, and PBoC) are moving ahead with enormous amounts of stimulus that act as a tailwind for stocks.

At the sector level, it was a ‘risk off’ week with leadership in the defensive consumer staples and utilities sectors while materials, energy and technology shares languished. The pressure on semiconductor stocks (SOX -4%) was again evident as concerns over PC sales impacted trading. Apple was notably weak (-1.5%) on concerns over iWatch sales and the banks gave back some of their recent strength (BKX -0.8%). Restaurants and specialty retailers posted some of the best results of the week. Earnings season is here and will be an important one - eighty companies have issued negative earnings guidance and twenty-seven have issued positive guidance. This approximate 4 to 1 ratio is actually a positive sign as lowered expectations make for a lower hurdle.

The overall market resiliency is encouraging but lack of breadth is not. Selectivity will be key as the market is highly skeptical and returns are hard to come by. This is a big data week as reports on retail sales, industrial production, housing and a testimony from Yellen are set to provide a market-moving headline or two. Also, with about a quarter of the S&P reporting earnings (Intel, Google, JPMorgan and Bank of America all report this week) I expect the focus to subtly shift from the macro to the micro.The agreement with Iran recently signed among superpower countries, could down the commercial barriers raised for so long against the country, with a potential impact on world wide oil reserves. Volatility on oil price could be here with us for a while.